Back in April, we began hearing that Microsoft was in the process of buying Israeli cloud startup Cloudyn, a company that helps customers manage their cloud billing across multiple clouds. It’s taken a while to work through the terms, but today Microsoft finally made it official.
Sources tell TechCrunch the price was between $50 million and $70 million.
In a company blog post today, Microsoft’s Jeremy Winter wrote, “I am pleased to announce that Microsoft has signed a definitive agreement to acquire Cloudyn, an innovative company that helps enterprises and managed service providers optimize their investments in cloud services.”
As companies continue to pursue a multi-cloud strategy, this gives Microsoft a cloud billing and management solution that provides it with an advantage over competitors, particularly AWS and Google Cloud Platform.
As TechCrunch’s Ingrid Lunden wrote in April, Microsoft has been pushing a multi-platform services approach, and this fits in with that overall strategy. It has the added bonus of giving them usage data across other cloud platforms:
It is here that Cloudyn could be a more useful addition to the Microsoft portfolio: a way to help Microsoft’s customers monitor how their services are working in the cloud, while perhaps in the process also giving Microsoft’s own services a helpful nudge in the mix.
It helps, too, that Cloudyn itself has been amassing a large client list itself. The company says that it works with “thousands” of companies, including “Fortune 500 leaders in all major industry verticals.”
Notably, Cloudyn also is already a Microsoft partner. In March of this year, it announced support for Microsoft Cloud Solution Providers — that is, integrators and other in-the-middle services providers who sit between Azure (or other cloud providers) and enterprises and manage and monitor usage on those platforms on their behalf, perhaps tied to a specific product at the business that the integrator has implemented. Infosys (which, again, invests in Cloudyn), Westcon-Comstor and Insight are already customers.
As Lunden noted, this should provide a solid return for investors:
To date, Cloudyn, which was founded in 2011, has raised $20.5 million, according to Crunchbase, from investors that include Carmel Ventures, Infosys and Russia’s Titanium (Calcalist notes a higher funding figure of $22.5 million). This means a $50 million to $70 million price tag is at least more than double, or nearly four times the money raised, and a 10x multiple on revenues, which Calcalist reports at between $5 million and $7 million a year.
Microsoft has acquired several other Israeli enterprise security firms, including Aorato, Adallom and Secure Islands, and earlier this month it bought Hexadite, another security firm, for $100 million, according to sources.